One of the few significant pro-business reforms to emerge from the Legislature during the recession was a more robust cost-effectiveness requirement for administrative regulations.

Authored by Senator Ron Calderon but written and shepherded by then-Senate staff and now Assemblyman Ken Cooley, the measure required agencies to analyze regulatory alternatives more diligently, provide more extensive economic analysis of major regulations, and require the Department of Finance to provide guidance to agencies on how to best assess cost-effectiveness of regulations and giving the Department limited oversight of agency regulatory analysis.

Since the administrative process was implemented in late 2013, agencies have taken a deep dive on 22 major regulations. The Legislative Analyst recently reviewed agency compliance with the Legislative mandates and made some useful findings and recommendations.

The Analyst made several recommendations that mirror proposals many regulatory reformers, including the Little Hoover Commission, have made in the past:

When it comes to adding or removing costs to doing business in California, the Legislature is the central player. No amount of regulatory reform can overcome a bad bill. But agencies often have a choice on how to implement the will of the Legislature, which is where thoughtful analysis and oversight come into play.

Here is a rare chance for the Legislature to improve administrative processes to advance a more competitive business climate – without upsetting other constituencies. The Analyst has clearly and carefully provided a roadmap to improve administrative rulemaking.